We propose a Policy Research Core, as part of the Research Center on Managed Care for Psychiatric Disorders. Managed care has become a major aspect of the American health care market place and features prominently in healthcare reform proposals. But little is known about how the formulation of policy through legislation or court decisions and market forces is shaping the development of managed mental health care in its various forms. Further the development of managed care is also shaped by how consumers respond to it, for example whether they select managed care plan options when faced with choices and levels of access and costs of mental health care under different forms of managed care. This Core focuses on the policy context for managed care, examining both how policy shapes implementation of managed care and how consumers respond to managed care options in terms of plan selection and service use. The Core features four projects, two on impact of policy and two on plan selection. One uses an intensive case studies approach to examine the perceptions of key policymakers, administrators, practitioners, and consumers regarding how private plans and practices, and public mental health agencies are responding to major legislation and market forces such as competition for consumer enrollment. This project focuses on California, where there is a particularly great diversity in managed care plans and practices. A second project uses historical and quality-of-care assessment methods to examine how institutional policies and expressed beliefs in treatment efficacy of key administrators in state psychiatric hospitals shaped the implementation of new technologies (electroconvulsive therapy, malarial fever therapy, lobotomy, and sterilization) during the first half of the Century in California; and how these administrative policies shaped clinician and patient responses to treatments. A third project examines effects of individual health characteristics such as level of depression and economic factors including individual income and wealth on participation in managed care plan options, using data from the Health and Retirement Survey. A fourth project will develop an approach to estimate the effect of different managed care plan characteristics on access to care for enrollees at high risk of having a psychiatric disorder, focusing on out-of-plan use and no use of mental health services. By assessing preferences for plans, the project will lead to a study of the potential costs and feasibility of increasing access to mental health care for high risk patients. The Policy Core includes an interdisciplinary team of researchers consisting of economists, sociologists, psychiatrists, historians, and philosophers. This group will also develop new proposals on the effects of policy on managed care implementation across states, on the influence of psychiatric disorder on plan selection, and on costs and access to care under different forms of managed care.